Everything You Need to Know about Narcissists, Psychopaths, and Abuse - click on this link: http://www.narcissistic-abuse.com/faq1.html
To avoid painful contradictions with reality or cognitive dissonances and also to ameliorate his raging abandonment or separation anxiety, the narcissist aims to micromanage and control his human environment by subsuming it or by merging and fusing with it (exactly as codependents do). His nearest and dearest are reduced to mere representations, avatars, extensions of himself, or internal objects.
This is where projective identification comes into play. Like the simpler projection defense mechanism, it consists of the attribution of the narcissist’s own psychological makeup, urges, desires, and processes to others. But it also involves forcing the target of the projection to conform to its contents: to actually become someone else and behave in ways prescribed by the narcissist (to undergo introjective identification).
In the idealization phase, the narcissist cajoles, coerces, extorts, and incentivizes his chosen source of supply to transform herself into the kind of person that the narcissist projects: intelligent, for example, or “strong”. Similarly, in the devaluation stage, the “target” is manipulated to assume, adopt, and exhibit the narcissist’s shortcomings and unmanageable, chaotic, and dysregulated emotions and behaviors, such as rage, envy, contempt, abusive conduct, and shame.
The narcissist rejects these and refuses to own them because they challenge his self-perception, his False Self, and his ability to regulate his sense of self-worth. So, instead, he “farms them out” and “outsources” them to others around him, while also pressuring them to playact these roles in the screenplay of his life and to affirm what he knows about the world and about himself, i.e., his comfort zone. They become convenient props, containers of unwanted bits of the narcissist’s persona and psyche, and constant reminders of his superiority and magnanimity.
Still, it is important to realize that the material that is cast off in the process of projective identification remains a part of the narcissist because the people it is projected onto are integral parts of him: his extensions and appendages, mere inner spectres. With the narcissist, projection and projective identification don’t work because, in his mental world, there are no “others”, no “outside”, and no “reality”. The narcissist’s solipsistic worldview prevents him from successfully getting rid of what bothers him the most: his imperfection.
(From the book "Malignant Self-love: Narcissism Revisited" by Sam Vaknin - Click on this link to purchase the print book, or 16 e-books, or 3 DVDs with 16 hours of video lectures on narcissists, psychopaths, and abuse in relationships: http://www.narcissistic-abuse.com/thebook.html)